There are more centenarians in England and Wales than ever before. The Office for National Statistics reports that there were 12,320 people aged over 100 at the end of last year compared with just 2,560 three decades ago. The number of people aged over 90 has tripled over a similar time.
The challenges presented by an ageing society are far reaching.
The pension system is an obvious one as the state encourages people to plan and save for a decent income in retirement as it is unlikely that few would cope with what it is likely to be able to provide.
Equally public services need reform to ensure that the elderly can receive the care and support they need to live independently for as long as possible.
And let’s face it – most of us would prefer to grow old (dis)gracefully in our own homes – but lenders appear to have a different view.
It seems that older home owners are finding it increasingly difficult to remortgage or move houses as lenders impose age limits on mortgage lending. Since the financial crisis, banks have gradually tightened their lending criteria. It seems that building societies are starting to follow suit. Over recent weeks a number are reported to have lowered maximum ages or imposed caps where previously they had no limits.
Restricting or blocking lending to the over-seventies also hits customers in their fifties looking to move home or remortgage. If a 55-year-old approaches a lender with an age restriction of, say, 75 then he or she will only be offered a 20-year term pushing up annual repayments.
There are also four million homeowners in the UK coming to the end of an interest-only mortgage and many are over 50. If they cannot repay the capital and cannot secure a new loan, they may be forced to move to a repayment basis with their existing lender. If an older borrower cannot extend the terms beyond age 75, monthly repayments could go through the roof and make the debt unaffordable.
And as the average age of first-time buyers increases – some predict it will reach 41 by 2025 – is there another time bomb ticking away?
The irony is that while lenders may shy away from older customers, household insurers welcome them with open arms. Older age groups are viewed as a better risk and consequently insurers actively court this age group. Search for home insurance for the elderly in Google and you’ll find a significant number of specialist 50+ insurers as well as the well known names like AXA, Aviva and RSA – all of whom are on The Source GI household panel – all touting for business.
While intermediaries may have their work cut out for them when looking to secure mortgages or remortgages for their older clients, thankfully it should be an easier job to secure cover to protect their home!
Kevin Paterson, is managing director of Source Insurance
Twitter: @SourceInsurance
